Economic overhaul: China opens doors to more private competition

In the biggest economic turnaround in two decades China’s leaders have pledged more private competition in dominant state industries. The new economic plan aims at rejuvenating a slowing economy and also eases limits on foreign investment in e-commerce.

The changes promised in a Friday report issued after a closely
watched Communist Party conference compares with the effort at
market-style reforms in 1978 that launched China's economic boom,
the Associated Press says citing the state media.

The lengthy policy document - officially named "a decision on
major issues concerning comprehensive and far-reaching
reforms" - was approved by the Third Plenary Session of the
18th CPC Central Committee, a four-day key meeting which ended on
Tuesday.

The ruling party said private competitors should have lower
barriers in the markets currently controlled by state companies,
though they reaffirmed that the state – owned industries will
remain at the core of the economy.

“We must promote orderly opening
to the outside,”the
report said.

The new plan envisages more freedom to create privately owned
banks, as well as use the market forces to allocate resources.
Both measures are hoped to help domestic private companies that
create most of China's jobs and wealth but struggle to get
financing.

China has recently been struggling to make a major turnaround
from an export – oriented economy to one driven by domestic
demand. The existing paradigm that delivered three decades of
rapid growth has run out of steam, with the economic growth
standing at 7.8 percent in 3Q, marginally higher than the two –
decades low of 7.5 percent produced in 2Q 2013.

In a move possibly aimed at responding to the rapidly aging
Chinese population, the report said the ruling party also will
ease the country's “one child” birth policy. It said the party will
allow couples in which one partner is an only child to have two
children.

Beijing says the thirty year-old birth policy, which is widely
disliked by many Chinese couples, has helped the country by
slowing population growth and conserving resources. But as the
average age of the country's population of 1.3 billion people
rises, Chinese leaders worry there will not be enough workers to
support a growing group of retirees.